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WHITEWAY NEON-AD., INC., et al. v. MADDOX.
18663.
Specific performance. Before Judge Pharr. Fulton Superior Court. April 13, 1954.
MOBLEY, Justice.
1. The allegations of the amended petition--to the effect that the parties signed a written contract for the erection and maintenance of an electric neon sign, that had been fabricated to petitioner's special order, on designated land controlled by defendants, which location was of great value to petitioner for purposes of advertising his business because there was no other location where such sign could be seen by as many people who would be influenced to trade with him, and that, after the sign had been partially erected, the defendants refused to comply with their contract--were sufficient to set forth a cause of action for specific performance of the contract, and, accordingly, the trial court did not err in overruling the general demurrers to the amended petition.
2. The portion of the answer of one of the defendants as amended, averring that it was without assets, funds, or employees with which to perform the contract, and for that reason it was impossible for it to perform, set forth no issuable defense to the petition for specific performance, and the trial court did not err in sustaining the petitioner's demurrer thereto.
Lester Maddox, doing business as The Pickrick, filed in Fulton Superior Court, against Whiteway Neon-Ad., Inc., a petition, which as amended alleged substantially the following: Sol Levin is president of and owns and controls the defendant corporation. On February 5, 1953, petitioner and defendant entered into a written contract, under the terms of which petitioner paid defendant $160 as the first month's rental, for the erection and maintenance of an electric neon sign, advertising petitioner's place of business, said sign to be located on a steel frame erected on a triangular piece of property located at the intersection of 14th Street with Hemphill Avenue and Northside Drive in the City of Atlanta. During the week of April 6 1953, defendant erected all the metal portion of the sign facing south and about one-third of the metal portion facing north. On April 10, 1953, petitioner noticed that the erection of the sign had ceased, and on April 11, 1953, he called upon Sol Levin, president of the defendant corporation, to ascertain why the work had stopped. Levin advised petitioner that the city authorities had stopped the erection of the sign because no permit had been obtained therefor, and that the traffic engineer would not approve the erection of the sign because it constituted a traffic hazard, which statements were false and were made because Levin was looking for an excuse to relieve the defendant from complying with its contract. Petitioner obtained the necessary permits from the city, paid for them himself, and delivered them to defendant by registered mail along with a letter dated April 17, 1953, in which formal demand was made for compliance with the contract. Thereafter, defendant through its president, Sol Levin, held several conferences with petitioner with reference to performance of the contract, and as a result of the conferences defendant's counsel in the latter part of June, 1953, advised petitioner's counsel that defendant would complete the erection of the sign. However, around July 1, 1953, defendant in violation of its agreement with petitioner removed the partially erected sign. The location of the sign is unique and is of great value to petitioner for purposes of advertising his business, and there is no other location where such sign would be seen by as many people who would be influenced to trade with him. While the sign is of tremendous value to petitioner as an advertising medium, and worth far more to him than the agreed rental of $160 per month, it would be difficult to establish with exactitude its value to him and his business. Damages for a breach of the contract would not be an adequate compensation for nonperformance, and petitioner is entitled to a decree of specific performance. Defendant has acted in bad faith in the premises, is stubbornly litigious, and has caused petitioner unnecessary trouble and expense, all in violation of Code 20-1404. Petitioner stands ready and willing to comply with the contract, which is fair and reasonable as to both parties, and there is no reason in law or in equity why the contract should not be performed by both parties. The contract was prepared by defendant's agents, the terms and conditions
thereof were proposed by defendant's agents and were accepted by the defendant, and the contract was signed by Sol Levin as president of the defendant corporation.
In answer to plaintiff's original petition defendant averred under oath "that it is impossible for it to perform said contract even if it were enforceable, for the reason that it has no assets to finance the performance thereof." At the time defendant made the contract with petitioner it contracted with Levin Neon Company to fabricate the sign called for, and Levin Neon Company did fabricate the sign. Levin Neon Company was formerly a partnership composed of Sol Levin and his brother, but Sol Levin bought his brother's interest and incorporated the business under the name of Levin Neon Co., Inc. Sol Levin not only owns the defendant Whiteway Neon-Ad., Inc., as above indicated but also owns all the capital stock in Levin Neon Co., Inc., is its president, and has absolute control over its corporate actions. On August 21, 1953, petitioner's attorney wrote defendant's attorney demanding that defendant perform its contract and advised that, unless defendant did so, a suit for specific performance would be filed. On August 25, 1953, defendant Whiteway Neon-Ad., Inc., transferred all its assets to Levin Neon Co., but specifically retained its liabilities and obligations under its contract with petitioner. Such transfer was a deliberate effort on the part of defendant to put its assets beyond the reach of court process, and was a fraudulent attempt on the part of defendant to strip itself of means and assets it could have used to comply with its contract, and was done for the purpose of hindering, delaying, and defrauding creditors, including petitioner. Defendant is insolvent. By the fraudulent actions of its president and sole stockholder, defendant has been stripped of its assets, except a few hundred dollars in cash, said assets having been transferred to Levin Neon Co., Inc., a corporation wholly owned by the same person who owns and controls defendant. Sol Levin and Levin Neon Co., Inc., should be made parties defendant. A receiver should be appointed, and the court should set aside the fraudulent transfer of stock and restore the status quo, and require defendant to comply with its contract. The prayers, among others, were: that process issue; that the court decree specific performance of the contract between petitioner and defendant Whiteway Neon-Ad., Inc.; that defendant be enjoined from transferring its assets, and Sol Levin and Levin Neon Co., Inc., be made parties; that a receiver be appointed for defendant Whiteway Neon-Ad., Inc.; that the transfers from Whiteway Neon-Ad., Inc., to Levin Neon Co., Inc., be set aside; that petitioner have general equitable relief. Copies of the contract and the letter demanding compliance with the contract were attached as exhibit's and made parts of the petition.
General and special demurrers were interposed by the defendants to the petition as amended. The defendant Whiteway Neon-Ad., Inc., also filed an ansWer which was subsequently amended.
Special demurrers here interposed by the petitioner to the answer as amended.
The trial court sustained two grounds of petitioner's demurrers to the answer as amended, and overruled defendants' general demurrers to the petition as amended. Certain grounds of defendants' special demurrers to the petition as amended were overruled and other special grounds were sustained.
The defendants in a direct bill of exceptions assigned error upon the above-stated rulings on demurrer in so far as the rulings were adverse to them. Other facts will be stated in the opinion.
Counsel for the defendants state in their brief: "There are only two questions for decision: 1. Does the plaintiff's petition set forth a cause of action good against general demurrer? 2. Did the trial court err in striking the defendant Whiteway Neon-Ad., Inc.'s defense of impossibility of performance?"
1. The defendants Levin Neon Company, Inc., and Sol Levin demurred to the petition as amended on the ground that it did not set forth any cause of action in law or equity against these defendants. The defendant Whiteway Neon-Ad., Inc., demurred to the petition as amended upon the grounds. (1) It does not set forth any cause of action in law or equity against defendant. (2) The contract is too general, vague, and indefinite to support an action for specific performance because: (a) It fails to specify the exact dimensions, the color, the advertising copy to be used, the kind or type of materials from which the sign should be fabricated, whether it was to be an electric-light or neon sign or a combination of both, the position in which it should be hung; fails to fix the depth or thickness of the sign or the type and kind of copy to be used. (b) The contract recites "copy to be as shown on a sketch which has been initialed and approved by the lessee," but the petition fails to attach the document therein referred to. (c) The contract is too vague, general, and indefinite for the reason it fails to set forth any fixed time for the contract to commence or terminate.
The agreement under consideration is a lease contract, covering an electrical advertising display fabricated to petitioner's special order. The size of the sign was to be approximately 5 feet in height and 26 feet in width, and was to hang below a display advertising Bailey's Supreme Coffee on a designated piece of land controlled by the defendants. The contract, which was dated February 5, 1953, was for a term of three years, with the right in petitioner to renew for another two-year period.
Under a reasonable construction of the allegations of the amended petition, to the effect that the sign had already been fabricated and partially erected, and that petitioner repeatedly demanded that defendants complete the erection of the sign, petitioner was willing to accept the sign that had been fabricated to his special order. The insistence by counsel for defendants that the contract was indefinite is controlled adversely to them by the decision in Blanton v. Williams, 209 Ga. 16 (70 S. E. 2d 461), where this court said, "the buyers' willingness to accept the house renders immaterial all indefiniteness in its specifications contained in the contract."
Another insistence is that the petitioner is not entitled to specific performance because the maintenance provisions of the contract call for personal services over a period of from three to five years. Taking the allegations of the amended petition to be true, as must be done on general demurrer, the thing that gives the contract a unique character is that the sign was to be placed upon a specific piece of real property over which the defendants had control, and the question of maintenance is only incidentally involved. It seems that the defendants in drawing the contract placed little or no importance upon maintenance, since it was provided that in the event the petitioner should default under the terms of the contract, and fail or refuse for any reason to make monthly payments therein set forth, then it was specifically understood and agreed that the liquidated damages for such breach would be the sum of the unpaid balance on the contract less the amount of electrical current that would have been used during the term of the lease. There was no such default clause in the contract to cover a breach by the defendants. In Black v. Milner Hotels, 194 Ga. 828 (22 S. E. 2d 780), this court affirmed a judgment decreeing specific performance of a lease wherein the lessor agreed to maintain the hotel building and equipment from one to five years. The maintenance services the defendants agreed to perform in the present case were small as compared to those in Black v. Milner Hotels, supra.
The allegations of the petition as amended--to the effect that the contract was fair to both parties, and that, while the sign was of tremendous value to petitioner as an advertising medium, and worth far more to him than the agreed rental of $160 per month, it would be difficult to establish with exactitude its value to him and his business--were sufficient to set forth the value of the services to be rendered.
It follows that the allegations of the amended petition--to the effect that the parties signed a written contract for the erection and maintenance of an electric neon sign, that had been fabricated to petitioner's special order, on designated land controlled by defendant, which location was of great value to petitioner for purposes of advertising his business because there was no other location where such sign would be seen by as many people who would be influenced to trade with him, and that, after the sign had been partially erected, the defendants took it down and refused to comply with their contract--were sufficient to set forth a cause of action for specific performance of the contract, and, accordingly, the trial court did not err in overruling the general demurrers to the amended petition. Code 37-801; F. & W. Grand Stores v. Eiseman, 160 Ga. 321 (7) (127 S. E. 872).
2. The defendant Whiteway Neon-Ad., Inc., set forth in its answer as amended that it was without assets, funds, or employees with which to perform the contract sued upon, and for that reason it was impossible for it to perform. These averments were stricken on demurrer as constituting no defense.
Equity will not decree specific performance of a wholly impossible act, for the reason that it will not decree a useless thing. However, the contract under review is not a lease of a sign to be fabricated and then placed upon the petitioner's property. If it were, it could be duplicated by other sign makers. The thing that gives this contract a unique character, as pointed out above, is that the sign was to be placed upon a specific piece of real property over which the defendants have control.
"The vendor seeking specific performance shall show an ability to comply substantially with his contract in every part and as to all the property; but a want of title or other inability as to part shall not be a good answer to the vendee seeking performance, who is willing to accept title to the part, receiving compensation for the other. If the defects in the vendor's title shall be trifling, or comparatively small, equity shall decree at his instance, granting compensation for such defects." Code 37-506.
The decision in Phinizy v. Guernsey, 111 Ga. 346 (3) (36 S. E. 796, 50 L. R. A. 680, 75 Am. St. R. 207), involved a vendor who contracted to sell a house and lot. Before delivery of the deed the house burned. This court said on p. 354: "We have no hesitancy in holding that the vendee in a case like the present is entitled to have a conveyance made to him of the land and compensation for the loss of the building, provided the loss thus sustained is capable of computation. If the plaintiff sustains his allegations, a decree should be entered, that the defendants convey to him the land which was the subject-matter of the contract, and that the purchase-price be abated in such an amount as is just and reasonable in view of the changed condition of the property."
Furthermore, the amended answer does not set forth a valid defense, for the reason that the amended petition alleges that the defendant Whiteway Neon-Ad., Inc. fraudulently transferred its assets to the defendant Levin Neon Co., Inc., both of the corporations being owned and controlled by Sol Levin, in order to put its assets beyond the reach of court process, and the amended answer does not aver that the latter defendants have no assets with which they could carry out the contract.
Other averments in the amended answer of Whiteway Neon-Ad., Inc., that were stricken on demurrer, to the effect that it could not perform the contract because it had entered into other contracts with the Southland Coffee Company, not having been argued or insisted upon in this court, will be treated as abandoned. See, in this connection, Roseman v. Wright, 209 Ga. 748 (1) (76 S. E. 2d 7); Anglin v. Anglin, 209 Ga. 823 (2) (76 S. E. 2d 498).
Applying the above-stated legal principles to the pleadings under consideration, the trial court did not err in sustaining the petitioner's demurrer to the portion of the amended answer of the defendant Whiteway Neon-Ad., Inc., which set forth that it was impossible for it to perform the contract.
All the Justices concur.
Lokey, Bowden & Rolleston, Hamilton Lokey, Wm. R. Harp, contra.
Thomas B. Branch, Jr., Arnold S. Kaye, for plaintiff in error.
ARGUED JULY 13, 1954 -- DECIDED SEPTEMBER 14, 1954.
Saturday May 23 03:54 EDT


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